Developing Corporate Strategies

As the market becomes chaotic the need to change the strategic formation models becomes apparent to match this need. Strategic behavior is associated with capital resources and the competencies of the corporation. A paper by EL Namiki in the Ivey Business Journal (2013) helps in furthering the Systemic Strategy Analysis Model (SSAM) of strategic thinking which understands the flows of thought formation within companies in order to analyze a company’s competitive position.

Strategic behavior is seen as a process of developing and enacting choices. Systematic strategic behavior focuses more on the developing and enacting of choices that are in alignment with the structural and environmental constraints of an organization. Strategic business choices, by their nature, are more confined than those enacted by individuals. Proper analysis is needed to define corporate strategy.

Where resources and company attributes meet each other there is a strategy that could be developed to full bloom.  When the attributes and resources change there would be a shift in the overall strategic trajectory. The path would adjust based upon the most advantageous route to achieving objectives. It is possible to map these concepts and draw out possible strategies. Consider the following four concepts when developing a strategy: 

Seeking Concentration: 

Concentration relates to the overall concept of market saturation. When a small amount of firms dominate an industry, it is said to have high concentration. If a large amount of entrepreneurial or boutique firms exist within an industry, there is a low level of concentration. The success of achieving a level of market presence will depend on the ability to meet the challenges of the environment based upon competing companies. 

Seeking Competencies:

Competency is a level of strong and competitive performance in a particular domain. It could be anything that furthers a strategy such as distribution, product design, technology, etc… Organizations seeking to enhance a competency either hire the right people or train them with competitive skills. Successful firms like Google have attracted the right talent to further their strategic competencies.

Seeking Focus:

At times it is necessary for companies to narrow down their efforts and focus on core offerings in order to enhance those things they excel in and remove activities they do not excel in. This may mean selling off brands that do not enhance core competencies or outsourcing internal functions that distract from the core strategy. Improving upon core competencies creates higher levels of competitive advantage. 

End Game:

When a company has maximized profits and a period of low profits sets into product lines or services they should consider an end game. This end game occurs when competitive offerings decline and there is little hope of recovery or the products have lost their market luster. Generally, this is a result of root misalignment between the offerings and current market needs. A strategy should include when to get out of the market and move onto new products and services. 

El Namaki, S. (2013). Strategic thinking for turbulent times. Ivey Business Journal, 77 (4).

Analysis for Overcoming Global Business Challenges

A paper in the Journal of Knowledge Management, Economics & Information Technology by Siddhartha Ghosh attempts to explore the methods in which a business may implement a strategy after the global downturn. He argues that the three components includes innovation promotional practices, social and organizational welfare, and ethical behavior.  He discussed the concept of innovation and the overall process of development that should occur. As firms implement new strategies, they will find an increase in market success through the use of proper analysis to meet global challenges. 

I-Ideas

N-New Plan or Design

N-Noticeable Changes

O-Optimum Change Evaluation

V-Variety

A-Adaption to the New Environment/New Business

T-Thought process for planned change.

I-Ideological developments in business.

O-Optimization of changes.

N-Numero Uno (Being at the top of the market).

The author further contends that there are four major strategies to competing within the market 1. Holistic Business Strategy, 2. Polymorphic Business Strategy, 3. Green business strategy and, 4. Country-club business strategy.  Each of the four strategies help organizations navigate the market in different ways. Through the development of strategy frameworks organizations can finder higher competitive frameworks. 

Country-Club Business Strategy:  Such organizations seek to find innovations and development in the human arena. They look at human innovation, human behavior, human productivity, and other human elements. The goal is to develop people and manage them well to create advantages for the organization.  Organizations can consider the SMIRNOFF Analysis or MEDICATION Technique.

Polymorphic Business Strategy: When organizations are already moving upwards they should seek to design strategies for how far they can go. They may use a HAIRL Analysis, encouraging employee decision making, and define their strategies to maintain their growth. Such organizations should seek to maintain their current growth but set longer-term sights to perpetuate their growth to the top of their market. 

Green Business Strategy: As one of the most practical methods, organizations should seek to develop their product lines and offerings to create greater revenue. They may consider MARCO-POLO Analysis, SWOT and other opportunity-based evaluations.  Such businesses seek to continue to develop and grow their customer’s bases using existing platforms. 

Holistic Business Strategy: The holistic strategy attempts to predict where the business will be at certain points in the future so that the proper decisions can be made. They may consider CATAPULT Planning or PERFECT Forecasting in an effort to determine likely market trends and outcomes. The goal is to stay ahead of these trends so that management decisions and operations can be adjusted.

The author proposes that there are four basic innovative strategies in the market. He categorizes these four strategies and offers analyses that may be used in forecasting and understanding the business. As businesses march out onto the global gladiator, arena they will need to ensure they are seeking multiple methods of understanding their prospects and designing appropriate methodologies. 

Ghosh, S. (2012). Change in strategy-the answer to overcome the global downturn. Journal of Knowledge Management, Economics & Information Technology, 2 (4).

The Development of Fluidity in Business Strategies

Strategy is a key method of navigating organizations to and through environmental changes. A paper by Tamas Meszaros provides some insight into the development of strategy over the past few decades (2012). He argues that strategy has moved from being something concrete to something more fluid. His arguments make sense in terms of the ability of executives to put forward strategies but then adjust those strategies based upon an ever changing environment. 

If we think of how fluid each decade has become with an advent of technology we may find that strategy is no longer stale and concise but is more of a trajectory toward organizational goals. The paths can change and adjust as new information and new pressures become apparent. As the environment changes so does the need to change the strategies based upon developing factors.  

According to Cummings, et. al. (2009) history has changed the way we view strategy:

-1960’s: Strategy was seen as a thing. Decisions in the present aim the organization toward a future outcome.

- 1990’s: Strategy was seen as a verb. Past practices create patterns that influence the present and future.

-Present: Strategy can be seen as an adjective or adverb. How future characteristics encourage current activities that creates paths to success.

The development of strategic thought is a result of the development of human thought and complexity. What was once seen as rigid is more fluid. Strategy can be seen as a future orientation based upon perception. The method of achieving the fulfillment of that perception rests on particular thoughts and actions that lead to the creation of a reality. It is a movement from perception to reality. 

Planning is a precursor to strategy (Roney, 1976).  Planning should take into account the various resources, cultures, abilities, market trends, and other factors in order to make reasonable predictions of outcomes. Yet these outcomes should have a focus on some achievable objective in the future. Strategy is the market approach that takes into consideration the available resources found in the planning stages. 

There is no definitive must use strategy for obtaining needed outcomes.  “Three decades of experience with strategic planning have taught us about the need to loosen up the process of strategy making rather than trying to seal it off by arbitrary formalization.” (Mintzberg, 1994.,p. 114.). Despite strategic fluidity there are some methods such as the Delphi Method, SWOT analysis and other methods that have proven track records. It should be remembered that such systems are ways of formalizing thoughts and are not infallible or apply to all situations equally. 

Others have described the new strategic planning process of simply being more adaptive by nature. “Strategic planning processes have changed substantially over the past two decades in response to the challenges of strategy formulation in turbulent and unpredictable environments. Strategic planning processes have become more decentralized, less staff driven, and more informal... permitting… greater adaptability and responsiveness to external change.” (Grant, R., 2003.p.515). As circumstances change so does the need to ensure that new information is calculated within the strategy.

Strategy is a fluid process that is based upon previous models that have worked well. One should not be so confined to these models as to not see new information as it enters into the situation. Strategy has moved from being a centralized function to taking on a more fluid decentralization. The reason is that the environment has become more fluid and requires new cognitive skills to master.  Strategy starts in the planning process and takes into account desired goals and attempts to match them with current resources and potentially successful paths to achieving those goals. Strategies should be evaluated and changed when the fluid environment deems it necessary. Such strategies should not be so fluid as to create chaos without a goal but should not be so rigid as to maintain an improper course of action.

Cummings, S. & Daellenbach, U. (2009). A guide to the future of strategy? The history of long-range planning, 42.

Grant R. (2003): Strategic planning in a turbulent environment: Evidence from the Oil and Gas Majors, Strategic Management Journal, 24.

Mintzberg, H. (1994). The Rise and Fall of Strategic Planning. Prentice Hall, Englewood Cliffs,N.J.

Meszaros, T. (2012). Traditional and new elements in strategic thinking. International Journal of Management, 14 (1). 

Roney, C. (1976).  The two purposes of business planning. Managerial Planning

1976/Nov.-Dec.

Book Review: Business Strategy by Jeremy Kourdi

The book Business Strategy-A Guide to Taking Your Business Forward by Jeremy Kourdi offers insight into understanding, developing and implementing strategy.  Each of these aspects is important for overcoming market difficulties that challenge and create difficulties for businesses. It is the ability of leaders to develop strategy and then implement that strategy in ways that are more likely to raise the success of an organization. 

The author provides a definition of strategy as it, “…is the plans, choices and decisions used to guide a company to greater profitability and success”. Strong strategies create higher levels of outputs while poor strategies often fail in their ability to meet defined goals. Such strategies should be well thought out and the alternatives should be weighed.

Henri Fayol, who established the classical school of management around 1910, developed some general management activities that fit within five sections: planning, organizing, commanding, co-coordinating and controlling:

-Planning: Understanding the organization and developing plans of action that leads to a stronger future.

-Organizing: Organizing includes the pulling together of resources to make the plan successful. 

-Commanding: Commanding can be seen as leading people through giving them appropriate direction to make the plan work. Leaders can make things happen.

-Coordinating: Coordinating involves ensuring that all people efforts, factors, and resources are put together in the most beneficial manner. 

-Controlling: Controlling entails ensuring that the process is moving along properly and is adjusted when necessary. It is possible to use feedback mechanisms, re-evaluation of strategy and other aspects in this area.

The book also discusses strategic innovation. According to the Talent foundation there are five catalysts for strategic innovation that include the following:

-Consciousness: Everyone knows the strategy and believes they can follow it. 

-Multiplicity: Groups have a wide varied of skills, backgrounds, experiences, and ideas.

-Connectivity: People have positive trusting relationships with each other. 

-Accessibility: People have access to each other and the resources they need to make their parts successful.

-Consistency:  There is a strong commitment to innovation regardless of the situation.

The book not only provides strong consideration of strategy and innovation but also provides a number of case examples for readers visualize this information. Business students and managers would find the book beneficial for their understanding. It can be a touch dry in its reading but that is what business books are by their nature. The author provides a number of references for those who are interested in additional information. 

Kourdi, J. (2009). Business strategy-a guide to taking your business forward. London, UK: Profile Books LTD. ISBN: 978 1 84668 124 0

Price: $22.00

Pages: 233

You purchase the book HERE